SUNR - PRESS RELEASE:
Sun River Mining Announces Report on Evaluation of Challana Gold Project
DENVER--(BUSINESS WIRE)--Jan. 26, 1999--Sun River Mining, Inc. (OTC BB:SUNR - news) announces receipt of a report entitled ''Review and Evaluation of the Challana Project, Tipuani Mining District, Bolivia'' from Patagonia Capital Corp. (''Patagonia'') of Evergreen, Colorado.
Patagonia was retained to provide an independent, third party assessment of certain properties that the Company was contemplating acquiring, and provide recommendations concerning the Company's financial needs.
The property covered by this report is discussed in Company news releases dated January 11 and January 14, 1999 regarding acquisition of a property (''Challana Property'') from Cooperativa Minera Aurifera 26 de Septiembre Poroma Ltda (the ''Cooperative'').
Effective immediately, the complete Patagonia report (including appendices detailing the sampling work undertaken at the Challana Property and Hazen Research's testwork and assay results) may be viewed at the Company's website: sunrivermining.com.
Current exploration and development work at Challana began in late 1997. Since that period, the Cooperative has recovered over 50 kilograms of gold from the development ores mined in the course of driving a 500+ meter exploration adit into the base of the Challana deposit. Patagonia estimates that the ground sluice processing methods currently being used at Challana are recovering on the order of 30% to 40% of the contained gold. Both Patagonia and Hazen reports provide suggestions on how the Company can significantly increase gold recoveries by making modest investments in additional processing equipment.
Discussions contained in the Patagonia report assume the completion of the Challana Property acquisition. In addressing estimated operating costs of the project, Mr. Stephen Doppler, Managing Director of Patagonia, states ''that a reasonable estimate of long-run, break-even grade, at Challana is on the order of 12 to 15 gm/Au/mt (equivalent to US$105 to US$130 per ounce at US$300 gold).'' Regarding the acquisition, Doppler states ''Sun River has an excellent opportunity to recoup a good portion of the US$500,000 exploration budget through net profits realized on gold recovered during the course of the proposed exploration and development program.
In certain conclusions, Mr. Doppler further states:
•''Challana is a low-risk exploration project with significant upside potential, and a property that clearly merits further exploration and development.'' •(The project will)''..offer Sun River an opportunity to immediately join the elite ranks of gold producing companies.'' •''Completion of the Challana transaction will provide Sun River with cash flow from on-going gold production, not to mention the significantly-higher equity market multiples awarded to gold producers.'' •''We are fully confident that successful and timely execution of the Challana exploration/acquisition agreement would make Sun River the partner of choice for other cooperatives in the Guanay-Tipuani region.'' •''...based on aerial photos and our visit to the property, we share (Giovanni) Viscarra's belief that there are two paleochannels on the property which run south for about 4 km, widening as they get further away from the current Challana River drainage. Based on Viscarra'a interpretations, it is quite possible that Challana is part of a much larger mineralized system extending south from the current workings to other areas of the concession.'' •''Recent exploration work suggests that Challana could be developed as a small tonnage, low cost, high-grade underground gold mine. Properly developed and managed, the project could be extremely profitable even at a long term gold price of US$300 per ounce.'' •''Lastly, the involvement of Giovanni Viscarra in the Challana project is a significant factor in our positive impressions and recommendations of the project. With over 15 years of experience in the Tipuani District, combined with stellar credentials and an impeccable reputation, we have great faith in Viscarra's expectations for the property. His conservatism and patience are to be admired, and Sun River should feel very confident that at then end of the US$500,000 exploration program, Viscarra will be able to clearly and conclusively demonstrate economic viability of larger-scale operations at Challana.''
The exploration/development contract requires an investment of US$500,000, scheduled to be made monthly over a minimum of six months commencing March 1, 1999 with an initial investment of $100,000, then $100,000, $100,000, $50,000, $50,000, and $100,000. However, the date for disbursement of the second and subsequent investment amounts are subject to a grace period, which allows the total investment to be made over the period of March 1, 1999 through Jan. 1, 2000. Rio Del Sol, a Bolivian subsidiary of the Company, shall retain ownership of the capital equipment required for the project (initial equipment is estimated to be approximately one-half of the $500,000 required investment). Rio Del Sol has entered into another agreement with the Cooperative to pay Cooperative $180,000 for compensation of existing mining works. $20,000 has been paid as of this date and the next payment of $26,000 is to be on March 1, 1999. The scheduled monthly payments thereafter are $46,000, $48,000, $20,000 and $20,000. After the exploration/development phase, contemplated by the Cooperative acquisition agreement, is completed the Company will determine any additional capital investment requirements. The Company does not currently have the funds to fulfill the contractual terms of the agreements with the Cooperative. The Company is actively pursuing appropriate funding to meet the terms of these agreements.
Management is excited about the Challana Property and the reports recently provided to the Company seem to confirm Management's belief that the property holds great potential.
Sun River Mining, Inc. is a gold exploration and development company active in Bolivia whose shares trade on the OTC Bulletin Board under the symbol ''SUNR''.
ON BEHALF OF THE BOARD OF DIRECTORS
Randy A. McCall,
President & CEO
------------------------------------------------------------------------
Contact:
Sun River Mining, Inc.
Randy A. McCall, 303/543-8434
Fax: 303/543-8435
E-mail: info@sunrivermining.com
Website: sunrivermining.com |
